Govt revises GST rate on 82 items to boost tax revenues

In a bid to improve indirect tax revenue, Union government revised GST rates on 82 items. The government also gave several clarifications on rates implied on various services. 

Decisions to cut rates for 29 goods and 53 services taken at the GST Council meeting presided by the Finance Minister Arun Jaitley on Thursday. The rates will be effective from January 2018. 

A whole lot of farming related items including fertilizer grade Phosphoric acid, bio-pesticides, drip irrigation system, mechanical sprayers will attract a lower GST rate of 12 per cent, instead of 18 per cent. On the other hand, rates on FMCG products like sugar boiled confectionery, drinking water packed in 20 litters bottles were also revised down from 18 per cent to 12 per cent. Bio-diesel has also been taxed lower at 12 per cent. 

Biofuel-powered buses used for public transport, second-hand motor vehicles will attract 18 per cent GST, instead of 28 per cent, while diamonds and precious stones will attract 0.2 per cent GST, instead of 3 per cent. GST rate sales of LPG by private firms to domestic consumers has also been reduced to 5 per cent as against 18 per cent. 

GST rates for Vibhuti, parts and accessories for the manufacture of hearing aids and de-oiled rice bran were brought down to nil, while rice bran (other than de-oiled rice bran) which was earlier exempt will now attract 5 per cent GST.

Also, to reduce the burden on research-based sectors, rates applicable for satellites and payloads, scientific and technical instruments, apparatus, equipment, accessories, parts, components, spares, tools, mock-ups and consumables required for launch vehicles and satellites and payloads cut from 18 per cent to 5 per cent.

The GST Council also provided clarification on tax applicable on the property, hospital services, admission to theme parks, events, theatricals and transportation of goods. GST rate applicable on tailoring service has been reduced to 5 per cent, which was earlier 18 per cent.

Hopes of GST rate revision seemed to have fueled the significant upward rallies that were seen during the last two trading session. At 10:26 hours, BSE Sensex was at 35,423.72, up by 163.4 points or 0.46 per cent and Nifty50 was trading at 10,856.85, up by 39.85 points or 0.37 per cent on Friday.